IOOF Investment Management picks up Dandenong office building off-market

A modern office building within Cbus Property’s Estate One office and industrial park in Dandenong has changed hands for $20.75million.

Colliers International’s Peter Bremner has facilitated the off-market sale of a 4,432sqm, four-level building at 45 Assembly Drive in Dandenong to IOOF Investment Management.

Mr Bremner said the sale represented a 7% yield, which was a strong result for the south-east office market driven by high levels of tenant and investor demand and a notable lack of available stock.

“A strong tenancy profile was a key drawcard to the property, being more than 90% leased to the CFA, ERMHA and Westpac,” Mr Bremner said. “Also a key factor in the sale was the high quality of the building, which was constructed by Hacer Group in 2014.”

The property is located within the Estate One office and industrial park, approximately 32km from the Melbourne CBD on the south west corner of the Princes Highway and South Gippsland Highway in Dandenong.

It comprises a four-level office building on a 9,548sqm site with ground and three upper levels of office accommodation, together with basement and at-grade car parking for 213 vehicles. The improvements are newly constructed and provide rectangular floor plates ranging from 703sqm to 1,347sqm.

The sale also included a parcel of land adjoining the building to the east, set to be developed into additional car parking or office accommodation.

“We were attracted by the significant lot size, the long eight year WALE, the stunning presentation of the as-new improvements and the high quality of the three flagship tenants,” Simon Gross, IOOF Senior Portfolio Manager, said.  “The Dandenong property is located within a high growth corridor with strong demographic trends and the asset will sit well within the IOOF direct property portfolio which continues to generated excellent returns for our investors.”

Adrian Pozzo, CEO at Cbus Property, said the sale of the property was part of an ongoing strategy at Estate One to divest parts of the estate once value had been maximised.